Looking for affordable home building insurance? Compare policies to protect your investment.
Building insurance covers your home in addition to other fixtures on your property - such as garages, fences, and sheds - against a wide range of events such as fire, storm, and flood damage. Compare building insurance policies, find the perfect cover, and protect yourself today.
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What do you want to learn about?
The basics of building insurance
Whilst contents insurance covers the things you own, building insurance protects your actual house. The policies are designed to cover your residential home, including flats, units, and townhouses. Your home is the most important asset you’ll ever own, so you need to make sure you have adequate cover in place for protection against a range of risks beyond your control.
What does building insurance actually cover?
Whilst no two building insurance policies are the same, there are some basics that you should be covered for.
- garages and carports
- sheds
- fences, gates and outdoor walls
- decks, patios, pergolas and verandahs
- outbuildings
- fixed swimming pools and spas
- garden borders and pathways
- driveways
- permanently housed or wired electrical appliances
- permanently fixed outdoor items like solar panels and satellite dishes
- clothes lines
- permanently attached fixtures including wall, ceiling and floor coverings
- boat jetties and pontoons.
- your contents
- any new building in the course of construction
- any part of the building which is used for farming, for example a barn or a silo
- temporary or mobile structures such as caravans or houseboats
- inflatable or portable swimming pools and spas
- carpets, rugs, blinds, drapes and curtains
- air conditioning units which are attached within a window
- plants, trees and shrubs
- hotels, motels and guest houses.
What events does building insurance cover?
If you're wondering what types of events are covered by building insurance, most building insurance policies cover events including:
- flood
- fire
- storm damage
- lightning
- earthquake
- tsunami
- theft and burglary
- accidental glass breakage
- impact
- escape of liquid
- explosion
- malicious acts and vandalism
- riot and civil commotion.
What events aren't covered by building insurance?
There are also other specific events and costs for which you will not be covered, such as:
- loss or damage caused by a storm surge or the movement of the sea
- flood cover will typically not protect you against damage to some things
- loss or damage caused by erosion, subsidence, landslide or mudslide
- claims for lightning will not be paid
- loss or damage caused by power failures or surges
- accidental breakage of glass to greenhouses or conservatories
- if your building does not catch on fire but receives heat, ash, soot or smoke damage, this will not be covered
- damage caused by cigarette burns
- theft or burglary by you or someone else who lives at the insured address. The same applies to malicious acts and vandalism claims
- leaks from agricultural pipes.
Comparing features and costs
How do I choose a policy?
It's easy to sometimes get overwhelmed by a policy's product disclosure statement. There are a few things that you should be looking at in a policy to determine if it's really all it's cracked up to be.
- Defined events. Many policies only cover defined events. This usually means that you're covered for things like fire, explosion, storm, earthquake, and vandalism damage. You will not be covered for any events that aren't classified under their events category. Read the PDS in detail and determine if you've got enough cover.
- Accidental damage. Spilt a glass of red wine on your carpet? Accidental damage covers those unforeseen events that can lead to damage to your home and possessions. It is a great safety net for those who may not have savings on hand to cover life's mishaps.
- Sum insured. The sum insured is the maximum amount that your insurance company will pay out in the event that your home is totally destroyed. It will typically cover the costs of rebuilding your home. Ensure that you value your home and contents adequately to prevent underinsurance. For a guide to underinsurance, head here.
- Safety net. Safety net home protection provides a buffer if the cost of rebuilding exceeds your sum insured. It's typically around 25-30% of your sum insured.
- Total replacement. Total replacement cover pays whatever it costs to repair your building. This means that you don't need to worry about any cost shortfalls, making it a great option for avoiding underinsurance. However, it is only available from a few insurers.
So what's the cost?
A premium is the amount you pay an insurer for their cover. There is no universal guide to determine how much the cost of your premiums will be. It reflects what the insurer believes is the likelihood of you making a claim. A few things that may impact your premium are:
- What level of cover you want. You will pay more if you want a comprehensive policy.
- The neighbourhood in which you live. Those who live in neighbourhoods with a higher likelihood of natural disaster or crime will pay more for their premium as it is determined to be at a higher risk.
- Your sum insured. The premium you pay corresponds to your sum insured. If you have a large sum insured, prepare to pay more.
- Any additional benefits. If you have selected any additional benefits then this will impact your premium.
- How often you choose to pay your premium. Some insurance companies offer discounts for those who pay their premium annually as opposed to monthly.
- Your incident history. If you already have a claims and incident history, chances are that your insurer will charge you with a higher premium as you are deemed to be at higher risk.
The following table highlights the variables of premium costs per year in a range of locations around New South Wales according to insurer.
Building and contents insurance quotes, December 2016 quarter
| Insurer | Range |
|---|---|
| One Path | $1,711 - $2,380 |
| Cominsure | $1,531 - $2,441 |
| AAMI | $1,076 - $2,002 |
| NRMA | $1,702 - $2,568 |
| Allianz | $1,143 - $2,174 |
| QBE | $1,619 - $2,108 |
| IAG/CGU | $1,270 - $2,658 |
| SunCorp | $1,437 - $2,926 |
| Coles | $1,044 - $1,916 |
| Woolworths | $1,205 - $2,028 |
| GIO | $1,685 - $2,794 |
| Westpac | $1,386 - $2,128 |
Source: Quotes acquired from Emergency Services Levy Insurance Monitor December 2016 report
How can I save?
- Shop around. Compare policies and prices for a better deal.
- No-claim bonus. Many insurers will reduce the price of cover if you don’t make a claim under your policy for a certain period of time.
- Choose a higher excess. This will result in lower premiums.
- Choose a lower level of cover. Consider whether you need the highest level of cover offered, plus ensure that you are not paying for options you will never use.
- Multi-policy discounts. Bundle your cover with another policy from the same insurer to save money.
- Age discounts. Some providers offer discounts for policyholders aged over 50.
Read our full guide on how to save cash on your home insurance.
Are there any other policies that might suit me better?
Commercial building insurance
If you’ve got a commercial property as opposed to a residential then commercial building insurance might be a better fit. These policies provide cover for your business’ contents, fixtures and fittings against a variety of events that can result in loss or damage.
Strata building insurance
This type of insurance is designed to provide cover for strata title properties and to be taken out by a body corporate or owners corporation. It includes cover against risks like fire, flood, storm and earthquake, as well as loss of rent if property damage forces tenants to leave. Theft, malicious damage, water and oil leaks, broken glass and legal liability are also included in cover.
Protecting yourself
The fine print: what should I be looking out for?
There are a few things to be aware of when reading your policy's product disclosure statements. Some of these include:
- Termites. Damage from pests such as termites is usually not covered as insurance companies see pests as the homeowner's responsibility. It’s perceived as a preventable damage, rather than an accident. If your property is prone to termites it’s best to become aware of this as soon as possible and treat it as necessary.
- Floods. Read carefully about the policy’s stance on floods. What is considered a flood by an insurance company varies wildly, so read in between the lines to determine what you’re covered for. For our full guide on storm and flood insurance, head here.
- Strata. If you live in strata such as an apartment block, your body corporate will have their own strata insurance that generally provides cover for your building, parking, and other shared areas. In most cases, you will be required to pay strata fees. Strata does not cover you for interior fixings, so most homeowners with a strata-titled property will also take out a contents only policy.
How much cover do I need?
Having the right level of protection in place can save you thousands of dollars in the long run. However, some estimates suggest that as many as 80% of Aussie’s are under-insured. Whilst it may seem appealing to cut costs at first, the risk of not having enough cover in place is not worth it.
The building insurance policy you take out should cover the total replacement cost of your property, including other expenses which may arise such as temporary accommodation. If you’re under-insured, you’ll have to pay the gap between what your policy covers and the replacement cost for your building, which in many cases could be a substantial amount of money.
The building insurance policy you take out should cover the total replacement cost of your property, including other expenses which may arise such as temporary accommodation. If you’re under-insured, you’ll have to pay the gap between what your policy covers and the replacement cost for your building, which in many cases could be a substantial amount of money.
Compare building insurance policies
* The offers compared on this page are chosen from a range of products finder.com.au has access to track details from and is not representative of all the products available in the market. Products are displayed in no particular order or ranking. The use of terms 'Best' and 'Top' are not product ratings and are subject to our disclaimer. You should consider seeking independent financial advice and consider your personal financial circumstances when comparing products.
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which insurance brand is best for building insurance?
please advice.
Hi Elizabeth,
Thanks for your question. finder.com.au is a comparison service and we’re not permitted to provide our users with product recommendations. There is no best insurance policy, it all comes down to your needs versus cover and costs. You can review the brands in our panel in the table above.
All the best,
Richard